Deloitte research: How to drive more cost-efficient access to capital, stronger valuations and earn investor trust with sustainability disclosures – an opportunity for corporate leaders.
Sustainable investing is the present, not the future.
Investors are increasingly incorporating sustainability factors into investment decisions:
⭕ 83% of surveyed investors incorporate sustainability information into fundamental analyses.
⭕ 79% of respondents have sustainability policies in place, compared to 20% five years ago.
⭕ Only 1% state they don’t have any plans to develop sustainable investing policies in the future – these results are consistent globally and across investor types.
Investors are seeking to minimize risks and capitalize on opportunity, with huge investments in global economic growth projected between 2021 and 2070 if the world economy transforms to achieve net-zero emissions.
They are looking for clear, consistent, evidence-based sustainability data and use ratings to gain a more comprehensive view of risk.
Despite growing demand for sustainability data, investors struggle with often inconsistent, unclear, and unreliable information:
❌ Unclear corporate sustainability strategies
❌ Incomparable data from ratings agencies
❌ Frequent lack of measurable outcomes from corporate reports
They believe regulations will ultimately clarify many of the data challenges investors face by bringing consistency and standardization to corporate sustainability disclosures.
Four actions that can help earn investor trust in corporate sustainability commitments:
➡ 1. STRATEGY & GOVERNANCE: Strengthen sustainable governance capabilities through greater coordination across the C-suite, to reliably execute on sustainability commitments.
➡ 2. SYSTEM SUPPORT: Invest in sustainability measurement, reporting systems, and compliance solutions to enable more robust, higher-quality disclosures.
➡ 3. ASSURANCE: Corroborate sustainability disclosures with third-party assurance. Investors trust assured disclosures as much as their own proprietary data.
➡ 4. ENGAGEMENT: Lead with investor engagement to address issues and foster transparency and accountability.
—
Deloitte and The Fletcher School at Tufts University embarked on a global study, executed between January and December 2023, to understand how companies can enhance investor trust in their sustainability disclosures.
The research was based on a survey of 1,000+ investors, including asset owners, asset managers, and investment advisers in North America, Europe, and Asia. The quantitative data was supplemented by 10 interviews with sustainability investors.
Source: How can the enterprise earn investor trust through sustainability disclosures?